October construction spending drops 1.2 percent

The Commerce Department says construction spending dropped by 1.2 percent in October, much bigger than the 0.9 percent decline that many analysts had expected.

The weakness was led by another sizable drop in home construction, which has fallen every month but two over the past 2 1/2 years. Nonresidential building also weakened as developers face tougher times getting financing because the banking system is going through a severe credit squeeze.